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Judge with GOP Ties Strikes Down Key Healthcare Provision on Insurance Mandates

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A federal judge in Virginia has ruled the government cannot force Americans to purchase mandatory health insurance or face penalties. The ruling came in a lawsuit filed by the state of Virginia, one of two dozen challenging the law in federal courts nationwide. The debate over the law is expected to end up before the Supreme Court. The judge in the case, Judge Henry Hudson, is the part-owner of Campaign Solutions, a Republican consulting firm that has worked to oppose healthcare reform. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: A federal judge in Virginia ruled Monday that a key provision of President Obama’s healthcare law is unconstitutional. Judge Henry Hudson in Richmond said the law’s requirement that most Americans buy health insurance or face penalties exceeds the regulatory authority granted to Congress under the [Commerce] Clause. In a 42-page opinion, Judge Hudson wrote, “At its core, this dispute is not simply about regulating the business of insurance — or crafting a scheme of universal health insurance coverage — it’s about an individual’s right to choose to participate.”

This is the third time a federal court has ruled on the constitutionality of the healthcare law but the first time it’s been ruled unconstitutional. There are some two dozen lawsuits challenging the healthcare law around the country. The debate over the law is expected to end up before the Supreme Court.

According to the New York Times, the rulings related to the legislation have split along political lines. The Times writes, quote, “Thus far, judges appointed by Republican presidents have ruled consistently against the Obama administration while Democratic appointees have found for it.” The judge in the Virginia case, Judge Hudson, was appointed by President George W. Bush. Hudson is the part-owner of Campaign Solutions, a Republican consulting firm that’s worked to oppose healthcare reform. Federal disclosures show he’s earned up to $108,000 in dividends from his holdings in the firm since 2003.

At the White House, Press Secretary Robert Gibbs told reporters he was confident of the law’s constitutionality.

ROBERT GIBBS: We’re confident that it is constitutional. And quite frankly, of the three courts that have rendered decisions on this question, two have ruled in our favor. The Department of Justice obviously is going to have to make some decisions about appealing this particular case. My sense is that that appeal decision is something they’ll likely make.

AMY GOODMAN: For more, we go to Washington, D.C., where we’re joined by Jon Walker, a writer and policy analyst for the website firedoglake.

Jon Walker, welcome to Democracy Now! Explain what the judge ruled.

JON WALKER: Well, the judge ruled that it was exceeding the powers of Congress, using the Commerce Clause, to force individuals to buy a service from a private entity. And so, he only struck down the individual mandate provision in the law, which requires everyone who doesn’t have insurance to purchase insurance from a private company.

AMY GOODMAN: And talk about the significance of this. By the way, how does it compare to, for example, when you buy a car, you have to have auto insurance?

JON WALKER: Well, for one thing, that is a state law. So that actually doesn’t have to do with the federal Constitution. That’s a state by state law. And the other thing is, you don’t have to own a car. You know, nothing is sort of forcing you to be the owner and driver of a car. As opposed to just living, which is the only requirement for you to be forced to buy insurance under the individual mandate. There is no way out of it. You know, this would apply to everyone. So it’s sort of a taxation through a private entity, and that is what he said was an overstep of the Commerce Clause in the current powers of the Constitution.


JON WALKER: And the effect it would have on the health — sorry.

AMY GOODMAN: Go ahead.

JON WALKER: The effect it would have on the healthcare bill, because he only struck down the individual mandate provision, there’s a debate about how big people think that is. I always considered that individual mandate to be so much less than the actual cost of the health insurance that the impact I thought it would have was rather minor.

AMY GOODMAN: So, talk about the ways, if this were — if the Supreme Court agreed, healthcare reform legislation could remain intact. How would it have to change?

JON WALKER: As far as Judge Hudson’s ruling, since he only struck down the individual mandate provision, everything else would remain in place. All the regulations, all the subsidies, all the expansion of Medicaid, all those would remain in place. People would — many experts think you need some thing to cause people to buy insurance before they get sick. The loss of an individual mandate itself is actually not all that critical. There are other ways to achieve a similar function. You could have everyone automatically enrolled in some public program. You know, Medicare currently is constitutional, obviously. You could tax people, give them some basic healthcare, have them then get the option to buy private insurance if they wanted to. You could provide an open enrollment period for the insurance companies, so you could only buy insurance without paying higher rates at a certain time each year to prevent people from only signing up when they get sick. You could put in place some kind of back payment system, or back premium payment system, where if you go to sign up for insurance and you had previously been uninsured, you have to pay the insurance companies, you know, what’s equal to six months of insurance premiums before they start covering you. So, there’s a bunch of walkarounds. If this is all that’s ever dropped because it’s unconstitutional, you should easily, if Congress is willing to — and that’s a big political question — find a solution that would still make the bill work.

AMY GOODMAN: What if a public option had been part of this legislation that was passed, Jon Walker?

JON WALKER: I think it would be very hard for him to reach this ruling, because he said it was unconstitutional for the government to tell individuals they had to buy from a private entity. With a public option on there, the government would be actually saying you have to buy this item of the government or face a penalty. So, I believe with the public option in there, it would have been constitutional. And you could even redesign the entire system with a public option, so that instead of it being a fee for not having insurance, it’s a general tax, provided the public option with the ability to then opt out for private insurance, basically in the same way we run Medicaid right now. You know, you can either get Medicaid or you can opt out into the private exchange, which is Medicaid Advantage.

AMY GOODMAN: I’m looking at the New York Times, which is talking about the Virginia Attorney General Kenneth Cuccinelli, who filed the lawsuit minutes after President Obama signed the law on March 23rd and has been discussing the case on cable television ever since. The Times writes, “By late afternoon Monday, he had already posted campaign fund-raising advertisements online that cited his victory.”

JON WALKER: Yeah, you know, this has become a real political hot potato. The interesting thing is, many Republicans in the past have signed on to the individual mandate. Mitt Romney obviously had an individual mandate in his healthcare bill in Massachusetts. There was the Wyden-Bennett plan, which was the healthcare plan proposed a few years back, had, I think, about seven Republican co-sponsors in the Senate. There was the alternative to the Clinton healthcare plan back in the ’90s put forward by Republicans, that also had an individual mandate in it.

So, the Republicans only really found their deep-seated opposition to it when it became Obama’s individual mandate and only started thinking it was unconstitutional when it was part of the Democrats’ healthcare bill. So, this entire time this has been quite politicized. And it’s no surprise to me that the two judges that found in favor of it were Democratic appointees, and this judge, Hudson, who is known to be a very conservative judge, appointed by Republicans, worked to advance Republican campaigns before getting on the bench, opposed it.

AMY GOODMAN: Well, let’s talk about —

JON WALKER: Or declared it unconstitutional.

AMY GOODMAN: — how the judge may benefit in various ways, including financial. The original piece appearing at gawker.com. Henry Hudson, the federal judge in Virginia who just ruled on the healthcare reform bill, calling it unconstitutional, owns between $15,000 and $50,000 in a GOP political consulting firm that’s worked against healthcare reform. His company, Campaign Solutions, a Republican consulting firm, that worked this election cycle for John Boehner, John McCain, Sarah Palin and others. Can you talk more about this, Jon Walker?

JON WALKER: Yeah, you know, it’s —- he did own this company before getting on the bench, and he’s continued to own it ever since. You know, some people had tried to make the connection that he should have recused himself because his company did work with the Attorney General on his campaign. Basically, it just shows that he’s a Republican operative in a Republican partisan -—

AMY GOODMAN: And his company worked against healthcare reform. And his firm worked against healthcare reform.

JON WALKER: Yes, and his company worked against it, you know.

AMY GOODMAN: And worked with, well, the incoming Speaker of the House, John Boehner.

JON WALKER: Yeah, you know, he’s a Republican partisan that got put on the bench. This is sort of sadly what’s been happening to our judicial system all over the place. You know, Clarence Thomas’s wife worked for a group that directly benefited from the Citizens United decision. This is unfortunately happening all over.

AMY GOODMAN: Well, Jon Walker, I want to thank you for being with us. That piece in Gawker also refers to the Huffington Post’s earlier reportage on this, as well as Judicial Watch. Jon Walker is a writer and policy analyst for the website firedoglake. Thanks for being with us today on this cold day.

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